By Mackenzie Tatananni

Oklo stock fell after the nuclear start-up posted a wider annual loss but analysts emphasized that the company's narrative matters more than the numbers.

Oklo, which has no revenue, reported late Monday a loss of 74 cents a share in 2024. That compares with 47 cents in 2023.

"We are an early--stage company with a history of financial losses, and we expect to incur significant expenses and continuing financial losses, " the company wrote in a filing with the Securities and Exchange Commission. Nevertheless, shares fell Tuesday by 7.2% to $28.67.

While the financial results may seem jarring, analysts were quick to point out that the company wasn't abandoning its aspirations, even in the face of near-term challenges.

In a research note Tuesday, Citi Research analyst Vikram Bagi reiterated a Neutral rating on the shares and trimmed his price target to $30 from $31.

The analyst said he anticipates higher cash burn ahead of the commissioning of Oklo's first nuclear reactor. While deployment remains on track, "larger cash requirements and increased likelihood of outside capital" likely will weigh on the stock, he added.

Bagi noted that Oklo was adding a 75-megawatt reactor design "due to data center customer requirements that indicate 60-75MW as the sweet spot." The company said its Aurora nuclear reactors can now generate between 15 and 75 megawatts from a single powerhouse, up from a prior range of 15 to 50 megawatts.

The new design leverages the company's existing 50-megawatt design and doesn't require license approach changes, Bagi noted. While the larger design necessitates higher upfront capital expenditures, he predicts that it will have "better overall plant economics."

The analyst also nodded to Oklo's acquisition of radioisotope producer Atomic Alchemy, which was completed earlier this month. In his view, the benefits of that deal will likely materialize next year, with Atomic Alchemy contributing to revenue starting in the first quarter of 2026.

Wedbush analysts led by Dan Ives reiterated an Outperform rating and $45 price target on Oklo stock. The analysts noted that Oklo's new 75-megawatt model puts the company "in a strong position to deliver more power to customers, specifically data centers," without changing the design of its small modular reactors.

In the most recent letter to shareholders, Oklo CEO Jacob DeWitte reiterated that the company remains on course to deliver commercial power by the end of 2027.

Oklo's latest Form 10-K painted a stark picture of the risks to its business model, noting that the company's success hinges on its ability to reach binding agreements with customers.

If no potential near-term client enters into such an agreement, this will delay planned construction and operation, Oklo said. Furthermore, this will spill over into delays in revenue, "and could hinder our ability to gain market traction with other potential customers."

The company said it had been "tentatively selected" to provide electricity and steam to Eielson Air Force Base in Alaska. However, the award has not been finalized and is "subject to our completion of various requirements set forth by the U.S. Air Force."

Uncertainty around Oklo's future profits weren't enough to deter Wedbush analysts, who believe the company "is taking a strategic approach to successfully capitalizing on accelerating market demand for nuclear energy solutions."

With more than 14 gigawatts of capacity in its pipeline, the company "maintains a strong position within the advanced nuclear fuel cycle," the analysts wrote.

In the analysts' view, Oklo is positioned to capitalize the push for nuclear energy solutions on the federal and commercial fronts, with the so-called "AI revolution" in its early innings.

Wall Street remains upbeat. Of seven firms surveyed by FactSet, five rate Oklo stock at Buy or the equivalent, while two rate it at Hold.

The stock's descent Tuesday may have also been in response to it closing up 14% at $30.94 on Monday, following a flood of good news.

The company announced ahead of earnings that it was taking the first step in applying for a combined license with the U.S. Nuclear Regulatory Commission. The license will allow Oklo to construct and operate its first Aurora powerhouse at Idaho National Laboratory.

The company said it was working with the U.S. Nuclear Regulatory Commission in a pre-application readiness assessment, allowing the NRC to review Oklo's licensing materials ahead of the full application review.

The assessment is meant to address content in the first phase of Oklo's submission related to siting and the environment, the company said.

The announcement came just days after Oklo signed an agreement with Idaho National Laboratory in anticipation of site investigation work such as drilling and soil sampling.

Speaking to Barron's last week, CEO DeWitte said the company hasn't poured money into research and development, instead relying on "mature, proven technology," in the form of small reactors.

"Starting at this size, it's really ideal for scalability with a lot of industrial applications," DeWitte explained. "It's designed to maximize things like the supply chain, construction, manufacturing, and logistical integration in the field, to pick up a lot of the timeline drivers."

Once operational, the company's primary product will be the energy produced from its Aurora powerhouses. Oklo plans to sell the energy to customers through power purchase agreements, as opposed to selling its powerhouse designs, which will pave the way for recurring revenue.

DeWitte co-founded Oklo in 2013 with fellow MIT graduate Caroline Cochran, who serves as chief operating officer. The company went public in May 2024 after merging with a special purpose acquisition corporation headed by OpenAI CEO Sam Altman, who remains on Oklo's board.

Also on Monday, the company announced the appointment of two new board members following Chris Wright's departure. Wright was confirmed to lead the U.S. Department of Energy on Feb. 3.

Oklo named Daniel Poneman and Michael Thompson to serve on the Nominating & Governance Committee and Audit Committee of the board, respectively.

Poneman served as the U.S. Deputy Energy Secretary from 2009 to 2014, while Thompson has been CEO and managing partner of Reinvent Capital, a tech-focused investment firm, since 2017.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 25, 2025 10:14 ET (14:14 GMT)

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